You have to be honest!!!

You have to be honest!!!

I am not entirely sure why this hit the news, but an agreement reached between a business tycoon and his estranged wife was set aside by Sir Paul Coleridge in the High Court this week when it transpired that the husband had lied to his wife about the success of investments which he held.

Without the wife taking legal advice, she had entered into an agreement with her husband as to how their assets should be divided upon divorce. The couple divorced in 2009. The wife stated that she wanted to move on quickly, so had chosen not to take legal advice. However, subsequent to reaching the agreement whereby the husband gave her £1.8m, she discovered that the husband had lied about his investments, and had told her that a company in which he had shares had no value. In fact, the said company had a turnover of £50m and the husbands shares were valued at £740,000. The husband also failed to declare an £800,000 investment.

Accordingly the wife applied to the court challenging the basis of the settlement. The agreement was effectively ripped up, the court setting it aside. The judge called for the agreement to be renegotiated to consider whether the wife ought to be paid a larger capital sum.

Sir Paul Coleridge stated, when talking about the demise of the availability of public funding, and legal advice becoming scarcer as a result, that it is more important than ever that financial details are presented to the other side and to the court in a clear, concise, and above all accurate way.

It has always been the case that there has to be full and frank disclosure in proceedings between a divorcing husband and wife regarding finances, with the requesite Form E (the form utilised by the Court to set out details of your financial circumstances) carrying a clear warning about failure to disclose the true extent of your financial circumstances.

In this case the parties reached an agreement, possibly without completing Forms E, but the judge gave a very clear warning when setting aside the arrangement, stating that the husband may have to pay more, and ruling that couples have a duty to tell each other the truth when striking a deal.